ABSTRACT
This chapter discusses that congestion was inevitable and one of the causes of diseconomies of agglomeration. It examines transportation demand in general and how transportation modes affect commuting patterns. The economic study of commuting combines four subdisciplines of economics, each one asking slightly different questions. The chapter looks at supply of transportation systems, both highway and mass transit. It compares the effects of government incentives with those of the private sector to evaluate the privatization solution that intrigues economists. The chapter sets up a supply and demand analysis to calculate the costs associated with externalities such as pollution, road damage, highway safety, and congestion. It considers several solutions to decrease congestion: increasing parking costs, instituting gasoline taxes, and creating congestion tolls. Trip chaining is the term that transportation economists use to explain commuter shopping. The chapter concludes by exploring the experiments of some cities that have tried to reduce congestion.
